Mere months after New Law pioneer Lawyers On Demand (LOD) secured private equity backers to position itself as a global player, fellow alternative legal services business darling, Riverview Law, has been acquired by Big Four accountancy firm EY.
The financial details of the deal, announced today (7 August), were not disclosed, but Riverview’s turnover is believed to have risen to more than £10m since it launched in 2012, meaning the acquisition is expected to carry a hefty price tag.
For EY, the purchase is touted as a means by which the accounting firm will look to enhance and scale its EY Law managed services offering. EY global head of alliances for tax, Chris Price, will become chief executive of the rebranded EY Riverview Law once the acquisition has been completed later this month. He will be working closely with the existing Riverview leadership as EY looks to service clients across the globe.
The acquisition also sees global law giant DLA Piper offload its stake in Riverview, with the firm previously owning 21% investment in the parent company, LawVest. That stake reduced to 14% after Riverview demerged with Kim Technologies, its highly-rated AI platform, in September 2017.
Riverview’s long-standing relationship with Kim was established when the New Law provider invested in the company in 2014. DLA has maintained a small minority stake in the technology platform following Riverview’s sale.
After launching in 2012, Riverview’s turnover has risen from about £200,000 to what analysts estimate is more than £10m. Riverview invested millions into Kim before the AI platform became separately funded as a global software business.
Speaking to Legal Business earlier this year, Riverview chief executive Karl Chapman (pictured) commented on law firms’ adoption of legal tech: ‘It is fascinating, there is a complacency driven by the profitability and margins that law firms make. It will take three to four years for that to really come home to roost and there will be some big winners in that changed environment.’
‘Corporate legal departments are moving at a much faster pace, they are adopting technology much quicker, and law firms will be required to catch up because the customer will require them to catch up,’ he said.
Cornelius Grossman, EY global law leader, commented: ‘Legal managed services is one of the fastest growing segments of the legal market. This acquisition underlines the position of EY as a leading disruptor of legal services; it will provide a springboard for current EY legal managed services offerings and bolster the capabilities that we can help deliver for EY clients.’
DLA’s decision to maintain an investment in Kim contrasts with Bryan Cave Leighton Paisner (BCLP), which sold its entire 62% investment in Lawyers On Demand (LOD) to buyout house Bowmark Capital in May.
Chapman added: ‘Put simply, we are excited by the next stage in our journey. We believe that the combination of the Riverview Law operating model, operating platform and people, alongside the EY brand, EY clients, existing legal services offering and global scale is a winning formula for the legal market.’
For more on EY and the Big Four’s push into the legal services market, read ‘Who’s afraid of the Big Bad Four? – Inside the accountants’ assault on law’ (£)